I was more looking for back end transformation to get a string back, however i found a work around that is working quite nicely, i'll share!

This uses MacroResolvers, which basically you can put your IDataClass as a Macro Resolver and then feed the "Template" to the MacroResolver to render. I stored the template strings in a database that the customer (or myself) can modify without needing to touch back end code.

Step 1: Create the Macro Resolver, filling it with the IDataClass sets

    public static ContextResolver getContextResolver(int ItemID, int OtherItemID)
    {
        ContextResolver resolver = CMSContext.CurrentResolver.CreateContextChild();
        // Get any IDataClass sets you want to "Load" into your resolver
        IDataClass MyDatabaseObject = Custom.GetTheObject(ItemID);
        IDataClass MyOtherDatabaseObject = Custom.GetTheOtherObject(OtherItemID)

        // set the macro callers up with the object data
        resolver.SetNamedSourceData("MainInfo", MyDatabaseObject);
        resolver.SetNamedSourceData("OtherInfo", MyOtherDatabaseObject);

        // Now if a macro is passed to the resolver, like "Hello {% MainInfo.Name %}" it will replace the 
        // MainInfo.Name with the Name column of that object loaded into it, in this case the MyDatabaseObject
        return resolver;
    }

Step 2: Grab the template string, i did from a database that has Name, Template

    public static string getOtherTemplate(ref ContextResolver objectResolver, string templateName)
    {
        // Fill the resolver with custom data
        // resolver.SourceParameters = new object[,] { { "MySimpleValue", "RESOLVED Simple value!" }, { "MySecondSimpleValue", "RESOLVED Second simple value!" } };
        // Use the resolver to resolve macros in text
        return objectResolver.ResolveMacros(getOtherTemplateMacro(templateName));
    }

    public static string getOtherTemplateMacro(string templateName)
    {
        QueryDataParameters parameters = new QueryDataParameters();
        parameters.Add("@TemplateName", templateName);
        DataSet ds = SqlHelperClass.ExecuteQuery("custom.templates.SelectTemplateByName", parameters, null, null);
        if (ds.Tables[0].Rows.Count == 0) return "No template found with name " + templateName;
        else return ds.Tables[0].Rows[0]["Template"].ToString();
    }

To execute, simply use the following then

ContextResolver myResolver = Custom.getResolver(1, 2);
String results = Custom.getOtherTemplate(ref MyResolver, "SomeTemplateNameThatMatchesTheNameColumnInDatabase");

Then just use K# syntax in the Database template field and you're set! Works quite well actually...